On September 25, 2009, FountainBlue held a conference at Sun Microsystems’ Santa Clara (California) campus. The title of the conference, “Virtual Worlds: Where We Were, Where We’re Going, What Does It Mean to YOU?”.

What follows is an event summary and guest post by Linda Holroyd – CEO, FountainBlue

Introductory remarks, framing the discussion were provided by:

Michael Gialis, New Business Development for Sun Microsystem’s Lab and Chief Technology Office, Founder of Virtual Worlds Roadmap Group

Barry Holroyd, CTO, Masher Media

An Overview of the History of Virtual Worlds – What is it, Where Has it Been was provided by Benjamin Duranske, Associate, Pillsbury Winthrop.

Below are notes from our conversation, along with resource links from our presenters.

Virtual Worlds offer a dynamic, ever-changing landscape of technology, community, interaction. Although Virtual Worlds have evolved over the past few decades, it is now coming to the mainstream, and its impact is deep and broad. It affects many facets of the way we do business from the financial, economic, technology and legal aspects, as well as HOW business is done, leveraging software the enables creative and dynamic interaction between people with virtual presences and online communities overall.

Virtual worlds are evolving from the walled gardens of the 1990s to more and more dynamic, interactive and creative sites that incorporate user content and creativity. This seems to be following the familiar evolution of the web itself; America Online and Prodigy became supplanted by more open browser standards from Mosaic.

Indeed, Virtual Worlds are evolving from a fad and a toy to a valuable business tool, serving and connecting various stakeholders. The graphics abilities introduced in the 80s and 90s brought in the era of avatars and games which were wildly popular, with some running still today. Now these graphics are being harnessed in virtual environments to effect value in a variety of non-game related use cases.

As more people got more deeply engaged, user communities arose and questions on policies, procedures and how users can interact and communities can grow arose. In addition, a business model evolution is now occurring where we are redefining who developers, publishers and retailers are and how they work together, as well as who is funding, marketing, and servicing these individual users and user communities. Users continue to raise the bar for what they can do and how they can do it, increasingly demanding more customized solutions and experiences tailored to themselves personally, and to the communities they join.

Adoption has not reached explosive double-digits figures yet for most virtual world communities, but with that said, in general the virtual worlds for kids sub-industry has benefited from the fastest and broadest adoption rate and continues to grow, showing that this is not a transient fad, but a real opportunity. Indeed, savvy publishers, manufacturers, producers and others selling to the kids market are factoring in web sites, books, toys, and virtual world communities as part of their marketing and outreach efforts. Successful examples of this maturing mass market segment include Webkins and Club Penguin.

Both panels remarked on the huge opportunities available in the media and entertainment industry. According to latest PriceWaterhouseCoopers Q2 2009 report, media and entertainment investments, totaled $115B, averaged $2 million per deal and totaled 52 deals, mostly from Silicon Valley (19), but also 10 from New York, and 6 from LA/Orange County. https://www.pwcmoneytree.com/MTPublic/ns/print.jsp?page=industry&industry=7100&region

The panelists and presenters had the following advice for virtual worlds entrepreneurs and intrapreneurs:

The growth of an individual virtual world, and the industry altogether might grow in fits and starts, depending on technology availability, user communities, adoption of standards, bandwidth constraints and other factors. Awareness of these challenges and addressing them headlong, in collaboration with other stakeholders will help drive the growth of the industry.

Minimize the barrier to adoption and drive the user base for your community: making adoption friction-less a critical factor for success. Make sure that there are no technology hassles (installing separate plug-ins and technologies), process hurdles (logging in, taking surveys, confusing steps), or marketing/branding confusion (they have to know where to go and that their trusted colleagues have recommended the experience), for example.

Take advantage of the ‘Hybrid Tiered Solution’, where general users (about 85%) get in free, and a certain percentage (around 15%) pays through micro transactions for premium services and a smaller percentage (1-3% for example) pays for ongoing subscription levels. The successful organization will offer a solution which would serve the individual needs of all three types of users, treating them all as valuable members.

Leverage the social communities (FaceBook, Twitter, iPhone, etc.) of the audience to leverage the growth of your community.

Content is king. Everyone wants more content, richer interaction, more activities, more engagement, etc. The successful company offers solutions which engages users while also setting appropriate controls and boundaries.

Focus on the needs of your target audience, whether they are frequent texters, or users of Twitter or FaceBook, creating a virtual world that lets them interact the way THEY want to will attract the audience you’re targeting.

Research patents in your space, and consider IP issues associated with user-generated content. Find the edge of the law to remain competitive, but stay on the right side of the law to avoid litigation and other problems.

Policies, regulations and enforcements in the virtual worlds space are rapidly evolving. Leverage resources to stay informed and be prepared to help shape, respond to these changes.

Adoption of hardware such as headsets and webcams etc. will continue to occur, but not nearly at the pace of the evolution of software. Therefore, if your virtual world incorporates hardware components, create games which work with existing hardware, and leverage existing markets.

Create a simple communication device to share information to the whole community, like a leader board, as it would generate discussion, invite more engagement, and help with the viral growth of the community.

Ease of use can be defined as the first 30 seconds, the first 30 minutes, the first 30 hours, and the first 30 days. Strategies for retaining and securing users for each of the ‘first 30s’ may vary, but they are also inter-dependent, and must always focus on the needs of the customers.

When designing a virtual worlds solution, speak to the people who would use it, like nurses or service station attendees rather than doctors (if they are not the ones who will use the solution) and managers (if they are not the ones serving the customer).

The panel raised some questions which could lead to hot virtual world business opportunities:

What are the challenges and opportunities in synchronist and asynchornistic communication? How can solutions bring more people from more places together and more richly interact?

How can virtual worlds assist with visualizing and modeling to support the innovation process and more cost-effectively make real technology- based solutions?

What opportunities can data analytics and data visualization provide?

Solutions across sectors offer opportunities. What might work for the education market, for example, might also serve a life science market. In addition, the technology for conducting a quest for a game might be adapted to organizational and productivity tools for businesses. What could this mean for YOUR company?

What are the intersections of where gaming meets music or education or homework and what solution could you create to serve the needs of that market?

In summary, our panelists and presenters have shown and told us that Virtual Worlds:

Are not only becoming more and more useful, they are also engaging and fun and potentially profitable.

Are being adopted in different ways to create and serve communities for personal and business benefit.

Are being increasingly more integrated into everyday business functions from training to education to service, branding and outreach. As such, challenges such as IP, security, privacy, and other factors will arise.

Are mature enough that metaphors and examples exist, making it easier for potential customers and partners to understand new technology and business model solutions. Second Life, early games, Mosaic, Silicon Graphics, Tivo, Qwaq and other others have forged the business, technology and cultural grounds and helped grow the industry. They have been around long enough so tools and technologies and solutions are available, and the technology adoption curve is not as steep.

Is not dominated by the US, as adoption of virtual goods and mobile platforms for example is 4-5x faster in Asia and Europe.

Linden Lab: Second Life enters the realm of the enterprise. Joe Miller, VP of Platforms and Technology Development, at Linden Lab talks to CNET’s Dan Farber about the challenges in developing dynamic and reliable backend operations for the 3D virtual world of Second Life. Miller also discusses how they’re incorporating new hi-tech conferencing tools for business users such as VoIP solutions and video streaming technologies. http://video.zdnet.com/CIOSessions/?p=310

Demo presentation by Nicole Yankelovich, Principal Investigator, Collaborative Environments program including Wonderland v0.5, Sun Labs will demo the new features / functionality and capability of our re-architected platform: http://www.projectwonderland.com

In conclusion, the opportunities in the virtual worlds space are massive, with the convergence of technologies and markets and solutions. And it will take basic business principals, including strategic leadership and superior execution, constant education, lots of hard work, and a network of influential contacts to remain competitive in this rapidly growing and evolving space.

At FountainBlue, we support transformative leadership, one conversation, one leader, one organization at a time. We therefore hope that you have enjoyed the meeting, and that the meeting and these follow-up notes, along with the attached updated list of attendees, and the attached bios, provide you with both food for thought and great connections. We will also post our notes to our community on both BigTent https://www.bigtent.com/groups/fountainblue and LinkedIn and invite interactive conversations around these notes through those communities. Although we welcome you to share our notes, with proper acknowledgment to FountainBlue and our sponsors and speakers, we ask that you DO NOT forward the contact list as it is intended to be shared with fellow attendees only.

In this age of social sharing, participation, “users as publishers”, Facebook updates and Twitter tweets, the webinar is a seeming anachronism. In your typical 60 minute webinar, the presenters speak for 45-50 minutes – and the only “participation” from the audience occurs when the presenter selects your question to be answered. Users are not able to see questions submitted by other viewers – in fact, they rarely know how many other users are also viewing the webinar.

Or the presenters drone on too long, overloading the audience with slides and not coming up for air until there is a few minutes left and the participants are too burned out to even attempt a last minute question. Webinars that incorporate reader chat and questions throughout the broadcast, rather than exiling them to a shrinking time slot at the end, are much more effective.

I agree wholeheartedly with this observation. I believe that webinars can be much more engaging if they adopted an unconference model. According to Wikipedia, “an unconference is a facilitated, participant-driven conference centered around a theme or purpose”. As a webinar presenter (or sponsor), you’ll still want to define the topic and prepare a set of slides to reinforce your speaking points and presentation objectives.

But, what if you were to hand over some control back to the audience? It requires a leap of faith, I know. But when the audience is directly involved, I think you create a more rewarding user experience – and, you stand to benefit as well. User involvement should directly result in engagement, retention and satisfaction.

Here are some simple ideas from Web 2.0 that can be applied to create Webinar 2.0:

Audience drives the content selection – the presenter flips through two potential slides to the audience and then pushes out a survey to the audience. The survey prompts the audience to select which slide they’d like to see covered. The presenter then publishes the survey results and advances to the slide that won the vote. This addresses one issue I’ve had with webinars – I attended the live webinar because the topic intrigued me; however, the content didn’t quite hit the mark. If presenters gave more control and input to the audience, they’d have a better chance of giving viewers what they want.

Audience members render their own slides – akin to a virtual meeting (e.g. WebEx, GoToMeeting, Adobe Connect), where the meeting host passes control to another participant, who then shares his/her desktop. For webinar platforms that support this, imagine how powerful this could be. Viewers would need to know to come prepared with slide content – but imagine the presenter asking for real-world case studies of a given technology and allowing a viewer to render a slide about his real-world implementation experience. Again, this is a leap of faith and a “risk factor” in surrendering control of the content. However, isn’t that what Web 2.0 is all about?

Better balance between PowerPoint content and Q&A – a typical webinar has an 80/20 split (or more) between the PowerPoint presentation and Q&A. I think it should be more like 50/50. Scheduling frequent pauses (to answer questions) provides a lot of value to viewers – it means that they don’t have to wait until the 50 minute mark to have questions answered – and it signals to the audience that the presenters are “listening” to them. Along these same lines, the webinar platform should allow all viewers to see all questions submitted by attendees. And to cap it all off, follow up after the webinar by publishing an FAQ – list commonly asked questions along with their answers.

Answer questions coming from the statusphere – define a Twitter hashtag for your webinar and have staff available to monitor the tweets – then, have presenters address and answer interesting questions that were posed via Twitter (and other social tools). This allows you to extend the audience of your webinar – and engage with users who might not be able to attend. Additionally, have staff members tweet back (with the answers), so that users monitoring the tweet stream know that you’re not only listening, but participating back.

I’m sure we’ve just gotten started – what tactics do you have to recommend for bringing Web 2.0 to Webinar 2.0?

The virtual events industry got its start in replications of a physical trade show or conference – the very first virtual events were virtual tradeshows, whereby platform providers re-created the look and feel of a physical trade show within a web-based environment. These sorts of virtual events continue to gain traction and I expect to see continued growth as additional corporations (and entire industries) enter the mix this year and into 2010.

Due to the flexible nature of virtual event platforms, however, we’re seeing parallel growth occurring via many other virtual applications that ride atop the same shared infrastructure and platform. As I wrote in a blog posting titled “Virtual Events: Available In Many Flavors“, we’re seeing virtual job fairs, virtual sales kickoffs and virtual partner summits running on vendors’ virtual event platforms.

Another application/venue that’s gained traction in 2009 is the virtual business community. Rather than a discrete and fixed event that occurs over a live date (or a series of live dates), the virtual business community is a 365 day/year service that users leverage for explicit business benefits. In my opinion, the Intranet of 2001-2008 will be moving towards virtual business communities, powered by the same platforms that service virtual tradeshows.

For me, the concept of intranet does not inspire much excitement or enthusiasm. I’ve used intranets to find information (specifications, pricing, a phone number, etc.), but have never yearned to log into the intranet while bringing up my morning email. “It’s just there” was the mentality I used to have. I believe that virtual event platforms can create a vibrant and virtual business community, significantly moving the intranet concept up the value chain. In fact, the business community becomes a virtual office, tearing down physical walls (and cubicles) to turn a globally distributed workforce into a close-knit and collaborative team.

Here are key tactics in building a vibrant business community:

Get users to keep coming back

You want your user base to login to the business community each morning before they even fire up their email client. In fact, a truly successful business community may support email-like communications within the platform, making users less dependent on email. To get your users to return over and over, you need:

Content – it needs to be timely, relevant and useful. Business-critical content should be housed here – the type of information that users need to get their job done – pricing sheets, internal contact information, customer contact information, product documentation, competitive analysis, etc. Don’t lose sight of the timely angle – have your executives post company updates/news and make them available via videocasts or video webcam.

Network effect – a bit of a chicken-and-egg problem here – but, you need to get a critical mass of engaged and sought-after employees interacting in the business community. Once you have that critical mass, you’ll see the community grow, as the “draw” will be access to and interactions with key colleagues. This is the same network effect that AOL Instant Messenger, Facebook and Twitter enjoyed – users sign up because their friends, family or colleagues were already there.

Enable social and interactive tools – today’s intranet needs to be empowered with the capabilities of AIM, Skype, Twitter and Facebook. This way, I not only find documents to download, but I interact with key people who have the answers I need. If I’m a product manager and need an answer from a lead software developer, he might not answer my phone call or return my email right away, but if I connect with him via text or video chat, perhaps he will. After all, I’m finding him in an (online) environment that he’s most comfortable operating in.

Enterprise-enable your Business Community

Today’s most successful social networking sites/services are used in a consumer setting (i.e. friends and family) – ask yourself what makes them successful and determine how those features can be adopted in a 100% (internal) business social network. I could see parallels of the following services made available internally within the business community platform:

flickr

Yahoo Answers

Skype

Facebook

Twitter

StumbleUpon

del.icio.us

Google

digg

The key, I believe, is not just to enable social tools for the sake of being social – it’s to enable social tools while simultaneously connecting those tools to your business applications and business processes. Possible ideas:

Integration with your HR / Human Capital Database – if you have a rich profile on each employee (birth date, interests, job function, etc.), expose shareable information within your social tools and auto-fill that information to make it convenient for all users. So if I’m sending out an internal tweet, my user ID is hyperlinked to a rich profile that describes all shareable information about me and my job role.

Integration with CRM Database – are users posting links to industry news and analysis? How about doing a keyword search by company and matching those up to sales opportunities in your CRM database? If an article was posted about Acme Corporation’s latest product launch, let Acme’s sales rep know, so that she can contact them about applicable services that you offer.

Integration with ERP systems – perhaps a crazy idea, but what if you could tweet about your latest business trip and have the expense management system parse your (internal) tweet and auto-generate a row in your online expense report?

All told, the possibilities are endless and quite exciting. I foresee the virtual business community (powered by a virtual event platform) to be a significant trend in the coming year. I believe this to be the future of the intranet for 2010 and beyond.

Your extended team worked weeks and months to plan and strategize for your virtual event – now, it’s time to deliver. While your attendees enjoy the convenience of joining the virtual event from anywhere, the functional leads on your team ought to convene in a single physical location while supporting the event. As I wrote in a posting on Virtual Tradeshow Best Practices, it’s a good idea to set up a virtual event war room – or, what I prefer to call a Command Center.

The notion is ironic – attendees gather virtually, but the support team gathers in person? Well, there’s tremendous value to face-to-face when supporting a large scale event. The benefits include:

Instant communication – If I discover an important issue, I can yell out my discovery and have the entire room hear me. Those responsible for addressing the issue can jump right onto it. I suppose you could set up an audio conference bridge to accomplish this sort of coordination, but sitting around the table (in the same room) makes it all the more convenient.

Better facilitates instant collaboration and problem solving – if there’s an issue that requires triage, I can lean over and look over the shoulder at my colleague’s monitor. We can troubleshoot the issue together and call over other functional leads as necessary.

Quick turnaround on requests – in any virtual event, there’s a series of requests that one functional team requires another to implement. Rather than handle the request communications via email or IM, it can be easier to walk to the other side of the room, communicate what’s needed and receive instant confirmation that the request is being addressed.

Builds camraderie – whether it’s the large cheer in the room when the two thousandth attendee enters or the laughing and joking at a team member’s expense, being in the same physical location builds a sense of team closeness and camraderie that’s hard to achieve over a conference bridge.

I fully expect that technologies will emerge to make a virtual command center an intriguing possibility – for now, however, I’m a firm believer in gathering the support team face-to-face. Here are some best practices in configuring and running the command center:

Carefully select the command center staff – you don’t want too many people in the room – however, you do want a lead from each functional area (e.g. Operations, Engineering, Marketing, Strategy, Communications, Support, etc.). Make sure the right staffers are present – and communicate to the rest of the extended team via IM, email and virtual meetings.

Arrange the command center seating strategically – similar to how a business might arrange employees’ cubicle assignments, determine the common collaboration paths – and seat applicable combinations of people close to one another. This way, Operations doesn’t need to walk across the room to huddle with Engineering – instead, they can tap one another on the shoulder.

Configure large-screen displays with dashboards – use the displays to show the virtual event in action – also create dashboards of key metrics that allow the team to spot trends or issues. For instance, a real-time graph of simultaneous users can flag a system issue if the upward trend line suddenly drops. Additionally, use displays to monitor attendee feedback, such as chat room activity and Twitter comments.

Schedule regular checkpoint meetings – make sure the team has a chance to stop what they’re doing and take a step back to collectively review where things stand. You want to provide a summary of recent happenings (or metrics), highlight issues that need addressing and identify any key trends for the team to be aware of. Take a moment to review your key metrics and ask all functional leads to provide an update. With everyone moving at a fast pace, it’s important to pause and get a handle on the bigger picture.

And finally, what’s one last benefit of the command center? At the successful conclusion of your big event, you all get to go out together for the celebratory dinner.

Forbes Insights published a study titled “Business Meetings: The Case for Face-to-Face“, in which the key finding was this: “the majority of executives polled believe face-to-face meetings are still crucial for building stronger, more meaningful and profitable business relationships.” Excellent points were made in the blogosphere this week regarding this study:

I don’t wish to question the conclusion of the Forbes Insights study – nor do I wish to have a debate on “face-to-face vs. virtual”. Despite the fact that I’m passionate about virtual, I’m a true believer in the value of face-to-face. What I would like to highlight is that face-to-face and virtual have unique capabilities. Meeting planners must consider these capabilities and apply them appropriately.

With virtual, an often-touted benefit is that they’re green and carbon-friendly. And while that’s certainly a nice side-effect, I think it’s important to focus on unique in-meeting capabilities of virtual – here are a few that come to mind:

Participatory training with seamless presenter transitions – while it’s true that a face-to-face meeting is hard to beat with regard to audience participation – in a virtual meeting, there’s still plenty of room for audience participation. In fact, with a shared whiteboard, participants can annotate a technical diagram simultaneously, which is trickier to do with more than 2 people (annotating) in a physical space. In addition, participants can be “handed the ball” and take turns serving as the presenter – without having to stand up, walk to the front of the room and plug their laptop into the projector. In an instant, a new presenter can start sharing her desktop applications for the rest of the meeting participants to see. In a 3D virtual meeting (e.g. Second Life, Lotus Sametime 3D), participation becomes even richer, allowing medical students, fighter pilots (in training), computer technicians, etc. to learn by interacting with 3D objects.

Meetings On Demand – what if your technical meeting needed to split up into a set of smaller focus groups? In a physical meeting, you’d need to gather up each sub-group and go seek out new conference rooms (or, migrate into corners of the same room, which could be distracting for everyone). Or, take another scenario whereby a senior executive wants to faciliate an ad-hoc face-to-face meeting during the coming weekend – all required participants would then need to make the necessary travel (and lodging) arrangements to get to the meeting venue. With virtual, meetings are truly on demand – you create the meeting with the click of a mouse and the participants arrive with the click of a mouse.

Putting the cards on the table – while this is difficult to quantify or prove, I believe that participants are more “at ease” in a virtual meeting and more likely to reveal thoughts that they’d otherwise be hesitant to do in person. A virtual tradeshow is a good example. Exhibitors have found that visitors to their booth are more transparent and revealing about budget, timeframe, decision making process, etc. – when interacting via text chat. The same person in a physical booth may be hesitant to reveal those details. So for meetings that can stand to benefit from more transparency and openness (and not all of them do!), virtual can be a boon.

More efficient person-to-person interactions – if you’re the chief executive of a company with 500 or more employees, I’m sure it’s hard for you to achieve the same quality time (with employees) as when you had 50 employees. If you assemble the company at a physical meeting, it’s a challenge to mingle with the crowd and achieve any true quality – you’ll be more akin to a president or dignitary, who walks down a receiving line shaking hands and patting folks on the shoulder. If you invite the same 500 employees to a virtual meeting or virtual event, you’ll find an easier ability to have meaningful interactions (via text chat) – including the potential to carry on multiple chats at the same time. Employees will also find that they receive more access to the chief (and other execs) than they would in a (crowded) physical space.

So those are some advantages that come to mind for me. What advantages have I missed?